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  • Debt & Negative Equity

    Property worth less than what I paid BMV

    Purchased my 1st property 2008 in the NE <65k ( valued 75k ) when prices headed south I didn't fluster however when I did the Rightmove / Zoopla online valuations I found at no time has a price within the area I purchased been near my purchase price never mind the valuation.

    Anyone have a similar situation?

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    You have bought unfortuently at near peak close to credit crunch? Early jan/feb ?

    and I have recently found a softening in the market.

    If you follow Dyslexic Landllord whom operates in NE and has more experience of local market.

    Im from NW , recently there was some posts here.

    https://www.propertytribes.com/stunned-by...490-2.html

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    Coming soon Investorsk8.com

    Wisdom - an integration of knowledge, experience, and deep understanding that incorporates tolerance for the uncertainties of life as well as its ups and downs. 

    Did you do the same due diligence at the time of purchase?  Just trying to understand how this situation arose ...

    If you purchased new build, then the developer might have been charging a premium?

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    Sorry with the reply.

    At the time it was thru a sourcing company whom had good reviews etc. I called a few estate agents regards the area whom classed as an average area no problems with rental and should be ok.

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    Oh yes I am in the same situation

    Property I purchased from 2005 to 2007 is worth less today than it was then

    Its not nice but its true

    My figs are as follows

    two bed flat 2007 85K

    two bed flat 2018 75K

    two bed flat after the crash 55k

    so the good news is property prices have risen but not recovered

    My yields are good and my interest rates are a third of what they were when I purchased the flats so I am not crying

    I think they will recover to asking price around 10 years time

    so in a nutshell no capital growth in 20  years

    There is a lesson hear for the rest of the UK

    What has happened in the North could well happen in the SE

    in 10 years

    It could be called the lost decade in regard to capital growth

    low wage growth

    higher taxation

    harder lending rules

    ect will hold Capital Growth back in general in the coming years

    My own lesson on my investments was the dropping of interest rates if I had not had low rates my Flats would have been an awful investment

    I am thankful for low rates

    in my own situation its Ironic but low growth allows me to sell my property to my company and avoid CGT

    so all in all its worked out ok

    I have options which I would not have had if the property had doubled in price quite ironic.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    DL

    I too have the same problems as you regarding flats in the NE. Can I ask what you are doing when your mortgages are coming to an end or you are remortgaging them into your limited company. In my case its worse as my flats require a new lease extension as well

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    I will sell quite a few  into my company and they will require a company Mortgage at the time around 8 years

    My goal in 8 years will be to have a low leveraged personal owned property I will keep in my name a lot of property I have made highest gains

    But I have made arrangements as a back stop incase I need to inject more cash as I obtain new mortgages in my own name

    I don't think property prices will rise much over the next ten years

    its  going to be low growth

    Its going to be a matter of rearranging property mortgages as they come along

    its a bit off yet but I am prepared

    all my company mortgages are on Capital and repayment so I have no issues with them but low leverage one way or another has to be my own road.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    In my business I look at as a whole and you have to take the rough with the smooth

    Made some great purchase after the crash all very good investments

    But I believe there is a lesson for all landlords in my message buy on yield only

    What has happened in the North my well happen in the SE but for very different reasons from the ones we had in the north in the past 10 years.

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    I expect many are in the same position and its only going to get worst. Property prices are way too high as we all know. Therefore a major adjustment is needed and during this time many will be foreclosed on as they hit negative equity, lose jobs and can no longer afford the mortgages/ rents. The first hit is always the cheapest. S

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